Ownership of real property - Rights and obligations of coten...

Learning Outcomes

This article explains the rights and obligations of cotenants in concurrent ownership that are heavily tested on the MBE, including:

• Distinguishing tenancy in common, joint tenancy, and tenancy by the entirety, and predicting how each form affects survivorship, creditor rights, and exam outcomes.
• Identifying each cotenant’s rights to possession, use, and income from the property, and recognizing when unequal possession does and does not create liability for rent.
• Analyzing when a cotenant in sole possession must pay rent to other cotenants, with particular emphasis on proving ouster and its impact on adverse possession and damages.
• Applying rules on contribution for property taxes, mortgage payments, insurance, necessary repairs, and improvements, and allocating these items accurately in an accounting.
• Evaluating when cotenants owe fiduciary-type duties to each other, especially in tax sale, foreclosure, and lease-renewal scenarios, and determining the remedies available.
• Assessing when and how partition in kind or by sale is available, and how courts handle credits, debits, and accounting for expenses, improvements, waste, and third-party rents.
• Using structured checklists and issue-spotting strategies to organize answers to cotenancy fact patterns under time pressure and avoid common MBE and essay traps.

MBE Syllabus

For the MBE, you are required to understand concurrent ownership of real property, with a focus on the following syllabus points:

• Forms of cotenancy: tenancy in common, joint tenancy, and tenancy by the entirety; creation, survivorship, and severance.
• Each cotenant’s right to possess the whole property and the concept and consequences of ouster.
• Liability among cotenants for rent, profits, and waste.
• Contribution rights and obligations for property taxes, mortgage interest and principal, necessary repairs, and improvements.
• The effect of one cotenant’s lease, mortgage, or conveyance on the other cotenants.
• The right to partition (in kind and by sale), who may seek it, and how courts handle accountings on partition.
• The limited nature of fiduciary duties between cotenants and the special situations that trigger them (e.g., tax sales, foreclosure sales).

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Which cotenancy form includes a right of survivorship?
   1. Tenancy in common
   2. Joint tenancy
   3. Tenancy by the entirety
   4. Both b) and c)
2. If one cotenant leases the property to a third party, what is the general rule regarding rent?
   1. The leasing cotenant keeps all rent
   2. Rent must be shared proportionally with all cotenants
   3. Only cotenants in possession share rent
   4. Rent is owed only if there is an ouster
3. Can a cotenant in sole possession generally require other cotenants to contribute to the cost of improvements?
   1. Yes, always
   2. No, never
   3. Only if the improvement increases value and there is a partition or sale
   4. Only if the other cotenants consent in writing

Introduction

Concurrent ownership arises when two or more persons hold title to the same real property at the same time. Each concurrent owner, or cotenant, has rights and responsibilities regarding the property and the other cotenants. On the MBE, many real property questions turn not on who holds title, but on how the law allocates possession rights, income, and expenses among cotenants, and how cotenancies can be ended.

The three main types of cotenancy tested on the MBE are tenancy in common, joint tenancy, and tenancy by the entirety. Understanding the distinctions between these forms, and the rules governing possession, expenses, waste, and partition, is essential for answering exam questions involving rent, repairs, ouster, and the right to force a sale or division of property.

Key Term: Concurrent Ownership
A situation in which two or more persons hold present possessory interests in the same real property at the same time.

Types of Cotenancy

The form of cotenancy determines what happens on a cotenant’s death, whether unilateral transfers are permitted, and what creditors can reach. These in turn affect the strategic options available to parties in an exam fact pattern.

Tenancy in Common

A tenancy in common is the default form of concurrent ownership. Unless a deed or will expressly states otherwise, a conveyance to two or more persons creates a tenancy in common.

• Each tenant in common owns a separate, undivided fractional share (which may be equal or unequal).
• There is no right of survivorship: when a tenant in common dies, their interest passes by will or intestacy, not automatically to the other cotenants.
• Each interest is freely transferable inter vivos, devisable by will, and inheritable by the tenant’s heirs.
• Modern statutes often presume a tenancy in common unless survivorship language is clearly used.

Key Term: Tenancy in Common
A concurrent estate where two or more persons hold undivided shares in the same property, with no right of survivorship. Each share is descendible, devisable, and may be conveyed separately.

On the MBE, tenancy in common often appears in inheritance fact patterns (e.g., siblings inherit property together) and in disputes about contribution and partition.

Joint Tenancy

A joint tenancy is characterized by the right of survivorship: when one joint tenant dies, their interest passes automatically to the surviving joint tenant(s). The decedent’s heirs or devisees take nothing.

• Creation traditionally required four formal elements, often remembered as PITT:
  • Possession: Each joint tenant has the right to possess the whole.
  • Interest: Each has an equal, undivided interest.
  • Time: Interests vest at the same time.
  • Title: Interests are acquired by the same instrument (or by the same adverse possession event).
• Modern law also requires clear survivorship language, usually something like “as joint tenants with right of survivorship.”
• Severance: If any element is destroyed (e.g., one joint tenant conveys their interest), the joint tenancy is severed as to that share, which becomes a tenancy in common. The remaining joint tenants continue as joint tenants among themselves.

Key Term: Joint Tenancy
A concurrent estate where two or more persons own property with right of survivorship. Requires four formal elements at creation. A deceased joint tenant’s share passes automatically to the survivors.

Exam traps commonly involve unilateral mortgages or contracts to convey by one joint tenant. In most states (lien theory), a mortgage by one joint tenant does not sever the joint tenancy, but a foreclosure sale does. In title-theory jurisdictions, even granting the mortgage may sever.

Tenancy by the Entirety

A tenancy by the entirety is a special marital estate available only to spouses in many jurisdictions.

• Creation requires the four elements above plus marriage (sometimes called an additional formal element).
• Includes a right of survivorship: on the death of one spouse, the survivor automatically owns the whole.
• Neither spouse acting alone can convey or encumber the property; unilateral attempts are void.
• In most states, creditors of one spouse alone cannot reach property held in tenancy by the entirety; only joint creditors of both spouses can.
• Severance generally occurs only by death, divorce, mutual agreement, or execution by a joint creditor.

Key Term: Tenancy by the Entirety
A concurrent estate between married spouses with right of survivorship. Neither spouse can unilaterally convey or encumber the property, and individual creditors of one spouse usually cannot reach it.

On the MBE, tenancy by the entirety often explains why an individual creditor cannot force a sale or partition, even though tenants in common and joint tenants may seek partition at any time.

Rights and Obligations of Cotenants

Regardless of the form, most day-to-day rights and duties among cotenants are the same. The core issues are:

• Possession and ouster
• Rent and profits
• Expenses, repairs, and improvements
• Waste and accounting
• Special fiduciary situations
• Partition

Possession

Each cotenant has the right to possess and enjoy the entire property, regardless of their fractional share. This is true even if one cotenant owns a much larger percentage interest.

A cotenant in sole possession generally does not owe rent to cotenants out of possession, because each has an equal right to occupy.

Key Term: Ouster
The wrongful exclusion of a cotenant from possession of the whole or any part of the commonly owned property, or a clear repudiation of the other cotenant’s rights.

An ouster changes everything:

• If a cotenant in possession denies another cotenant access to the property (e.g., changes locks, refuses keys, or tells them they have no rights), that is an ouster.
• The ousted cotenant may:
  • Sue for their share of the fair rental value of the property for the time they were excluded.
  • Seek an injunction restoring their right of access.
  • In some jurisdictions, start the statute of limitations running for adverse possession against the ousted cotenants.

Because every cotenant has an equal possessory right, courts require clear evidence of ouster to treat sole possession as hostile for adverse possession purposes. Mere long-term exclusive occupancy and payment of expenses is usually not enough; there must be conduct that clearly puts the other cotenants on notice that their rights are being denied.

Exam Warning

When you see one cotenant living in the property for many years and claiming full ownership, ask: did they ouster the others or clearly repudiate the cotenancy? Without ouster, adverse possession against cotenants usually fails.

Rents and Profits

Cotenants frequently disagree about who is entitled to income from the property.

• From Own Use: A cotenant in possession need not pay rent to other cotenants for ordinary residential or personal use, absent ouster or agreement.
  • Example: A lives in the house, B lives elsewhere. A owes B no rent merely because A uses the property.
• From Third Parties: If a cotenant leases the property (or any part of it) to a third party, the leasing cotenant must account to the other cotenants for their share of the rent, minus appropriate expenses.

Key Term: Accounting
An equitable proceeding in which a court determines how income and expenses should be allocated among cotenants, often in connection with a partition suit.

Thus, if one cotenant leases the entire property to a tenant for $2,000 per month, the net rent is divided in proportion to ownership shares. If that cotenant simultaneously pays property taxes and necessary expenses, those amounts can be deducted in an accounting.

• From Exploiting Resources: Profits from depleting the land, such as mining, oil and gas extraction, or timber cutting, must be shared according to ownership shares.
  • If the exploitation was unauthorized and reduces the property’s value, it may also constitute waste, as discussed below.

Key Term: Waste
Unreasonable conduct by a possessor that permanently injures the property or substantially reduces its value, to the detriment of other interest holders.

Expenses

Cotenants often disagree about who must pay what. Distinguish between:

• Carrying costs (taxes, mortgage payments, insurance)
• Necessary repairs
• Improvements

Key Term: Contribution
A cotenant’s right to be reimbursed by other cotenants for more than their fair share of certain necessary expenditures on the property.

Taxes, Insurance, and Mortgage Payments

Each cotenant is responsible for their proportionate share of property taxes, reasonably necessary insurance, and mortgage payments on common debt.

• A cotenant who pays more than their share may demand contribution from the others, usually through an action for contribution or in an accounting during partition.
• If the paying cotenant is in sole possession, some courts limit contribution to amounts exceeding the fair rental value of the property. The theory is that sole occupancy is itself a benefit.

Example: A and B own Blackacre as tenants in common. A lives there, B does not. Property taxes are $3,000 per year. A pays all taxes. Fair rental value is$2,000 per year. In many jurisdictions, A can seek only $1,000 in contribution from B, because A’s beneficial sole use effectively “pays”$2,000 of the taxes.

Necessary Repairs

Necessary repairs are those reasonably required to keep the property habitable and prevent deterioration (e.g., fixing a leaking roof, repairing a broken furnace).

• A cotenant who pays for necessary repairs may seek contribution from the others.
• However, many jurisdictions allow this only in an accounting or partition proceeding, not as an immediate stand-alone claim.

This means you often see exam fact patterns where one cotenant has made substantial repairs over years and then seeks credit when the property is partitioned or sold.

Improvements

Improvements are voluntary changes that increase the property’s value (e.g., adding a deck, finishing a basement) but are not strictly necessary to preserve the property.

• There is no general right to contribution for improvements, even if other cotenants consent informally.
• In a partition or sale, the improving cotenant may receive a credit equal to the increase in market value attributable to the improvement (not necessarily the cost).
  • If the improvement decreases value or is unwanted, the improving cotenant bears the loss.

Courts try to avoid penalizing other cotenants who did not choose to invest; they treat improvements as a risk voluntarily assumed by the improving cotenant, with any net benefit or loss allocated accordingly at partition.

Worked Example 1.1

Three siblings inherit a house as tenants in common. One sibling lives in the house for four years, paying all property taxes and making $10,000 in roof repairs. The other siblings do not request possession or pay any expenses. Can the resident sibling demand rent from the others? Can they demand contribution for taxes and repairs?

Answer:
The resident sibling cannot demand rent from the others; a cotenant in possession generally owes no rent unless there is ouster or agreement. The resident sibling can demand contribution for taxes (shared according to ownership shares), but contribution for repairs is typically available only in an accounting or partition action. The $10,000 in repairs may be credited in a partition or sale to the extent they preserved or increased value, but there is no immediate right to contribution.

Ouster and Adverse Possession Between Cotenants

Because each cotenant has an equal right of possession, a cotenant’s mere exclusive occupancy is presumptively permissive from the standpoint of the co-owners. To acquire full title by adverse possession against another cotenant, the possessor must:

• Ouster the other cotenant or clearly repudiate the cotenancy, and
• Provide reasonably clear notice of that repudiation (or engage in conduct that would put a reasonable cotenant on notice), and
• Satisfy the jurisdiction’s statute of limitations for adverse possession.

Merely living there, paying taxes, and making improvements for the statutory period is usually not enough to be “hostile” as against other cotenants without ouster.

Exam​ Warning

A fact pattern where one cotenant has been “in open, notorious, exclusive possession, paying all expenses, for 20 years” does not automatically mean adverse possession. Ask whether the cotenant communicated an intent to hold exclusively, or otherwise ousted the others.

Worked Example 1.1​

Two joint tenants own a rental property. One leases the property to a third party and collects all rent. What must the leasing cotenant do?

Answer:
The cotenant who leased the property must account to the other cotenant for their share of the net rent, after deducting appropriate operating expenses. Rent collected from third parties is shared proportionally among all cotenants, regardless of possession.

Waste and Protection of the Common Property

Each cotenant must refrain from committing waste. This includes:

• Voluntary (affirmative) waste: Deliberate destructive acts (e.g., tearing down a structure, stripping fixtures).
• Permissive waste: Failure to maintain or protect the property (e.g., allowing a roof to leak).
• Ameliorative waste: Changes that alter the character of the property but might increase value (e.g., converting a historic mansion into offices).

Other cotenants may seek damages or an injunction to prevent waste. Extraction of natural resources beyond the scope of prior use may be treated as waste but will still require sharing any profits in an accounting.

Fiduciary Duties

Cotenants generally do not owe each other formal fiduciary duties merely by virtue of co-ownership.

However, courts impose higher duties in certain special situations, often where one cotenant’s actions could unfairly cut off the others’ interests:

• If one cotenant buys the property at a tax sale or foreclosure sale prompted by nonpayment of taxes or a default on a common mortgage, that cotenant is often treated as having acquired title for the benefit of all cotenants, provided the others are willing to contribute their share of the cost.
• Similar principles apply if one cotenant renews a lease that benefits all.

In these circumstances, the purchasing cotenant cannot simply wipe out the other cotenants’ interests; they must offer an opportunity to participate by paying their proportionate shares.

Key Term: Fiduciary-like Duty Between Cotenants
A heightened duty imposed in special circumstances (such as a tax or foreclosure purchase) requiring a cotenant to hold acquired title for the benefit of all cotenants who contribute their share.

Leases, Mortgages, and Conveyances by One Cotenant

Each cotenant can generally deal with their own undivided share without the consent of others:

• Leases: One cotenant may lease their interest to a tenant. The lessee steps into the cotenant’s shoes, becoming a cotenant with the others for the lease term. The lease cannot bind the other cotenants’ possessory rights, and it ends when the lessor’s interest ends (e.g., on that cotenant’s death in a joint tenancy).
• Mortgages: A cotenant may mortgage their share. The mortgage attaches only to that cotenant’s interest.
  • If the mortgagor defaults, the lender can foreclose only on that cotenant’s share, and the purchaser at foreclosure becomes a cotenant with the others.
• Conveyances: A cotenant can convey their undivided interest inter vivos. In a joint tenancy, such a conveyance severs the joint tenancy as to that share.

In a tenancy by the entirety, however, neither spouse can unilaterally lease, mortgage, or convey; any attempt is void or creates only a contingent interest that may be defeated if the nonjoining spouse outlives the grantor.

Partition

Any tenant in common or joint tenant (but not a tenant by the entirety) has the right to demand partition at any time. Partition terminates the cotenancy and converts concurrent interests into separate ownership interests or cash.

Key Term: Partition
A legal action to physically divide (partition in kind) or sell (partition by sale) concurrently owned property, terminating the cotenancy and distributing land or proceeds among former cotenants.

There are two main forms:

• Partition in Kind: The court divides the property physically among the cotenants if practical and fair.
  • Preferred at common law and still favored where feasible.
  • Courts may award slightly unequal parcels with cash “owelty” payments to equalize values.
• Partition by Sale: If physical division is impractical or would significantly decrease the property’s overall value, the court orders a sale and divides the proceeds according to ownership shares.

In deciding between them, courts consider:

• Whether the land can be divided without prejudice to the owners’ interests.
• The number of cotenants and the nature of the property (e.g., a single-family house vs. a large tract of land).
• Whether a forced sale would be more equitable.

Partition actions routinely include an accounting to sort out:

• Unpaid contributions for taxes, insurance, and mortgages.
• Credits for necessary repairs.
• Credits or debits for improvements (increase or decrease in value).
• Rent collected from third parties and any liability for waste.

Partition is not available in a tenancy by the entirety while the marriage exists; neither spouse can unilaterally force a sale.

Exa​m Warning

Watch for a cotenant demanding that another “buy them out.” There is no right to a forced buyout, but there is always a right to partition (unless the estate is a tenancy by the entirety). The remedy is division or sale, not forced purchase at a unilaterally chosen price.

Worked Example 1.1

A and B own Blackacre as joint tenants. A moves out. B lives on the property for 15 years, paying all taxes and mortgage payments. B never communicates with A, but B tells neighbors that Blackacre is “mine now.” A later reappears and claims half the property. B argues that B has acquired full title by adverse possession. Who prevails?

Answer:
A prevails unless B can show ouster or a clear repudiation of the cotenancy communicated to A (or conduct likely to give A notice). Merely living on the property, paying expenses, and making self-serving statements to neighbors is usually not enough to make possession hostile as against a cotenant. Because B did not oust A or clearly notify A that B was claiming exclusively, the adverse possession claim fails and the joint tenancy (or a tenancy in common if severed) persists.

Worked Example 1.2

C and D own a small apartment building as tenants in common, each with a 50% interest. C lives elsewhere. D manages the building, collects $4,000 per month in rent, pays$2,500 per month for mortgage, taxes, and necessary repairs, and retains the remainder. After five years, C sues D for an accounting and contribution. What is C entitled to?

Answer:
C is entitled to 50% of the net rental income (gross rents minus appropriate expenses) over the five-year period. If gross rent is $4,000 and D’s legitimate expenses are$2,500, net rent is $1,500 per month. C’s share is$750 per month. D is not entitled to additional contribution from C for the expenses, because D has already used the rental income (a common asset) to pay them. The court will compute the net amounts in an accounting and award C the appropriate sum.

Exam War​ning

Exam Warnin​g

On the MBE, be alert for questions where a cotenant in possession is sued for rent by an out-of-possession cotenant. Unless there is ouster or an express agreement to pay rent, no rent is owed. Many students incorrectly assume rent is always due whenever possession is unequal.

Revision Tip

Revision​ Tip

Keep the following in mind:

• Contribution for taxes and mortgage payments is usually required.
• Contribution for necessary repairs is often allowed, but typically only in an accounting or partition.
• Improvements do not generate a current right to contribution; they are handled later by credits or debits in partition based on changes in value.

Key Point Checklist

This article has covered the following key knowledge points:

• Three main types of cotenancy: tenancy in common, joint tenancy, and tenancy by the entirety.
• Tenancy in common is the default; there is no right of survivorship.
• Joint tenancy requires four formal elements and clear survivorship language; severance by transfer converts the severed share into a tenancy in common.
• Tenancy by the entirety is limited to spouses; it includes survivorship and strong creditor protection, and neither spouse can act alone.
• Each cotenant has the right to possess the whole property, regardless of fractional share.
• Ouster occurs when a cotenant is excluded or the cotenancy is clearly repudiated; ouster can create liability for rent and start adverse possession between cotenants.
• Cotenants must share net rent from third-party leases and profits from exploitation of resources.
• Contribution for taxes, mortgage payments, and necessary repairs is generally available; improvements are credited (or debited) only in an accounting or partition.
• Cotenants owe no general fiduciary duty, but special fiduciary-like duties arise when one cotenant acquires title at a tax or foreclosure sale or renews a common lease.
• Partition (in kind or by sale) is available to tenants in common and joint tenants, but not to tenants by the entirety, and includes an accounting for expenses, income, waste, and improvements.

Key Terms and Concepts

• Concurrent Ownership
• Tenancy in Common
• Joint Tenancy
• Tenancy by the Entirety
• Ouster
• Waste
• Contribution
• Accounting
• Fiduciary-like Duty Between Cotenants
• Partition